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Australian dollar falls to new lows

DXY firmed last night, helped by a weak EUR coming out of a big miss in German industrial production:

AUD broke support and is at new lows in a correction with no real end in sight:

It was mixed against EM forex:

Gold was smacked, auguring more DXY strength:

Brent rebounded:

Base metals a little as well:

Big miners did not as iron ore crashed:

EM stocks held on:

And junk:

Treasuries were bid:

But not as much as bunds:

Stocks firmed again:

Not much data which left the market to march higher. It is interesting to note that BofAML’s proprietary bear market warning system triggered another stop, taking the number of indicators in the red to 11 out of 19:

Room to run higher yet. Or, in the case of AUD, lower. And, when the bear market does arrive (perhaps sometime later next year) and risk runs for cover, the AUD is hardly going to reverse upwards is it?

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David Llewellyn-Smith is chief strategist at the MB Fund which is currently long local bonds and international equities that offer superior growth and benefit from a falling AUD so he is definitely talking his book.

Here’s the recent fund performance:

Source: Linear, Factset

The returns above include fees and trading costs on a $500,000 portfolio. Note that individual client performance will vary based on the amount invested, ethical overlays and the date of purchase. The benchmark returns do not include fees. October monthly returns are currently at 4.9% for international and 4.2% for local shares.

If the themes in this post and the fund interest you then register below and we’ll be in touch:

The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. The MB Fund is a partnership with Nucleus Wealth Management, a Corporate Authorised Representative of Integrity Private Wealth Pty Ltd, AFSL 436298.

Comments

AUD B-coin and Gold. Very interesting, the approach to risk is quite amazing in that it seems like investors are searching out ‘pain’. They will be successful. I wonder about paper gold after B-coin loses its luster.

The article below is worth a read, I agree with most of this except the conclusion. It is now too late to raise rates. The property market has turned. Instead they will be forced to sit on their hands as it collapses as they have no ammo to spare.